Thank you. Good morning and thank you for joining us on Hain Celestial's fourth quarter and fiscal year 2019 earnings conference call. On the call today are Mark Schiller, President and Chief Executive Officer; and James Langrock, Executive Vice President and Chief Financial Officer.

During the course of this call, management may make forward-looking statements within the meaning of the federal securities laws. These statements are based on management's current expectations and involve risks and uncertainties that could differ materially from actual events and those described in these forward-looking statements. Please refer to Hain Celestial's annual report on Form 10-K, other reports filed from time to time with the Securities and Exchange Commission and its press release issued today for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today.

Please note, management's remark today will focus on non-GAAP or adjusted financial measures. A reconciliation of GAAP results to non-GAAP financial measures is available in the earnings release.

The company has also prepared a few presentation slides outlining the fiscal 2020 outlook and additional supplemental financial information, which are posted on Hain Celestial's websites under Investor Relations. This call is being webcast and an archive of it will also be available on the website.

As you'll recall, at the beginning of the third quarter, we laid out our revised strategy and financial plan. That strategy was founded on transforming the U.S. performance and continuing the steady margin and profit expansion in the international business. U.S. transformation was built on 4 key strategic pillars: one, simplifying the portfolio and organization; two, strengthening our core capabilities; three, expanding margins and cash flow; and four, reinvigorating profitable top line growth in a core set of brands .we explained that in the short term, we would start to see immediate progress on the first 3 and that top line growth would materialize later as we optimized in-store assortment and build innovation and velocity driving marketing program.

With regard to the second half fiscal '19 earnings, we told you to expect the following in the U.S.: one, continued margin -- gross margin and EBITDA margin expansion versus the first half with sequential improvement each quarter; two, improved trends in EBITDA dollars; and three, continued top line erosion with some expected volatility. We also communicated that the amount of the decline would depend on how fast we were able to shrink the money-losing brands and SKUs by eliminating noneconomic activity, rationalizing SKUs and taking strategic pricing.

Internationally, we said you should expect continued steady performance in both adjusted gross margin and EBITDA margin and dollars, and that despite the uncertainty associated with Brexit, we expected a solid Q4. With that in mind, I'm pleased to report that our fourth quarter results showed strong progress against our strategy and commitment. As expected, these financial results demonstrate sequential and performance improvements in many key areas of our business, and we remain on track to achieve our fiscal 2020 operational and financial objectives that we laid out during our Investor Day in February.

To summarize our Q4 results, our team generated operational improvements both in the U.S. and internationally. This executional progress drove significant sequential improvement in consolidated adjusted gross margin, adjusted EBITDA margin and adjusted EBITDA dollars in Q4 compared with other quarters this fiscal year.

Q4 adjusted gross margin increased for the third straight quarter and finished at 23.0%. This was up 140 basis points from Q3, 270 points from Q2 and 400 points from Q1.

Adjusted EBITDA margin also increased for the third straight quarter and finished at 10.2%. This was up 90 basis points from Q3, 250 points from Q2 and 410 points from Q1 with solid improvements in both the U.S. and international.

Importantly, I'm very pleased to tell you that our adjusted gross margin and EBITDA margins in Q4 also increased versus a year ago. This is the first year-on-year quarterly increase in those 2 metrics since the second quarter of fiscal 2018, reaffirming that our financial performance has improved dramatically since implementing our new strategy.

Now to provide a little more color, let me start with the U.S. business. Our adjusted gross margin improved for the third straight quarter, finishing up at 24.9%, up 160 basis points from Q3, 480 points versus Q2 and 630 points versus Q1. Importantly, it was also up 250 points versus last year, the first such year-over-year increase since Q1 of fiscal '18.

Adjusted EBITDA margin in the U.S. also had its third consecutive quarter of improvement ending at 10.1%. That result is 50 basis point improvement versus Q3, 350 point improvement versus Q2 and 560 point improvement versus Q1. This, too, was an increase versus last year, the first such year-over-year increase since 2015.

We told you there were multiple opportunities to improve profitability in the U.S. Now that we have the right people on the team focused on the right areas with the right tool, our financial progress has improved materially, and our confidence in our transformation is growing every day.

Before I turn to the international business, I wanted to give you some detail on progress we're making against our 4 strategies to demonstrate and validate our confidence that we are setting ourselves up for sustained and continued progress.

Starting with our first strategy, simplifying the organization, we indicated that we had too many brands for a company our size and that the complexity was inhibiting our ability to execute and deliver superior performance. To that end, in the quarter, we completed the divestiture of remaining Hain Pure Protein brand and the WestSoy brand, which were low margin and low growth, with minimum potential to be accretive to our portfolio. In addition to simplifying the portfolio, these divestitures also improved our balance sheet as we paid down debt and reduced our leverage to 4.2x.

Our team also took aggressive actions to further our SKU optimization effort. This is expected to address over 90% of the low-margin SKUs in the U.S. and Canada by eliminating, cost reducing and/or pricing SKUs that don't have meaningful profit. Overall, we're eliminating approximately 350 SKUs, which is about 12% of our total SKUs in North America. It also eliminates the need for about 20 co-manufacturers, again, further simplifying our business.

Our second strategy, strengthening our core capabilities. In Q4, we started a restructuring of the North American business to create centers of excellence, reduce layers, increase bands of control and focus resources. We've consolidated 5 sales forces into one, created cross-functional business teams to better build our brands and increased resources in areas like innovation and consumer insight. We've also implemented a new trade management system to give us better visibility to our spending and its effectiveness, allowing us to optimize promotions with customers. While we expect there will be some modest savings going forward from this restructuring, the primary drivers of these changes are efficiency and effectiveness.

In addition to the changes in structure, we've also added 2 more senior leaders to our organization in Q4. That brings the total new hires on my leadership team since the first of the year to 6. We now have a world-class team with capabilities and skill sets that are well in line with our transformation journey.

On our third strategy, expand margins and cash flow, our team has been delivering significant progress in the middle of the P&L, with more to come in fiscal 2020 and beyond. Just comparing our second half performance to the first half, distribution cost dropped 120 basis points. Inventory dropped 13%. Service improved 150 basis points and ended the year at over 95%. While we have more work to do here, we're making good progress. Fines and penalties related to poor service dropped by 47%. Pricing increased by more than 2%.

Our fourth strategy is reinvigorating profitable top line growth in a core set of high-potential brands. We've identified these brands at our February Investor Day as the Get Bigger brands residing in Personal Care, snack, tea and yogurt categories. You'll recall, we expected to see year-over-year revenue declines in fiscal '19 and fiscal '20. This is partly due to lapping distribution losses and partly due to the elimination of uneconomic investments and SKU rationalizations. That said, unit velocities on our Get Bigger brand increased 10.2% in the quarter. That's up from -- 100 basis points up from the last quarter and 800 basis points from the first half. So while the total distribution points are down due to margin expansion program, the items left on the shelf are turning faster than the category growth rate. That's a key indicator of the health of these businesses. We expect these velocities to remain strong because we are also reallocating resources for these Get Bigger brands with the goal of creating category, growing innovation and equity-driving marketing program. While in the early stages, we're starting to build the foundation for consistent growth, and we'll talk more about these changes when we present at the Barclays Investor Conference next week.

I noticed some of you look at the total U.S. top line decline of 11% in the quarter and have questions about the underlying health of the business. To that end, let me first remind you that we articulated at Investor Day and our last earnings call that the top line in the U.S. would be choppy as we pull out uneconomic investment, reduce unproductive SKUs and reassess pricing. I also explained that the faster we attack those issues, the faster the top line would erode, resulting in a smaller but more profitable business in the short term and a stronger foundation from which to grow in the future. As we evaluate our performance, we see several important signs that our top line is getting stronger, not weaker. First, I just mentioned the velocity improvement in the Get Bigger brand. Second, the consumption of Get Bigger investment brands grew slightly in Q4 as measured in mainstream MULO channel. Third, the percent of SKUs with velocity sitting in the bottom quartile of their categories has dropped 4% since the beginning of the fiscal year, meaning that the SKUs still on the shelf are more likely to hold their shelf space going forward. In addition, we're lapping a year ago quarter where customers build inventory prior to a price increase. And as a result, this year, our consumption outpaced shipment by 4% in the quarter, again, suggesting the sales decline in Q4 is somewhat overstated. So in short, the Q4 top line is not a concern. It should be viewed as a positive that we were, in fact, able to pull out even more unprofitable investment to simplify our business while delivering our profit metric.

In summary, I'm very pleased with our progress in the U.S. and our ability to deliver on our adjusted gross margin and adjusted EBITDA margin expansion, as promised, while creating a much stronger foundation for the future.

Now let me shift to the international business. As we communicated last quarter, we expected to see continued margin expansion and improved adjusted EBITDA with some top line softness as we eliminated low-margin promotion and work down customer inventory built as a hedge against the potential Brexit disruptions in March. That said, the international results in the quarter were very solid. Adjusted EBITDA was up 9% versus the same period last year and up a very strong 14.7% in constant currency.

Adjusted gross margin improved to 21.6% in the quarter, up 150 basis points from Q3, 220 points from Q2 and 240 points from Q1. And versus year ago, it was also up 160 basis points.

Adjusted EBITDA margin was at 13.8%, excluding corporate overhead, which is up 140 basis points from Q3, 220 points from Q2 and 430 points from Q1. This is the highest EBITDA margin the international business has delivered since 2015. It was also an impressive 230 basis points better than year ago.

Similar to the U.S., we have segmented the international brands and are aggressively reducing uneconomic investments in lower margin and lower growth potential brands. Between that aggressive margin management and customer inventory reductions, top line was down in the quarter, so we saw a solid growth across a number of brands. We're encouraged by the strength of our portfolio where we have more than 10 #1 and #2 share brands. Many of them are exhibiting growth, and our plant-based meat substitutes and beverages are particularly strong. All in all, given the difficult business environment in Europe and the uncertainty in the U.K. surrounding Brexit, the team did an exceptional job navigating these challenges and delivering strong performance.

Yesterday, we also announced the sale of the Tilda brand for $342 million, which was 13.5x EBITDA. This represents a significant premium to most other food transactions done in the U.K. or in the rice and pasta industry over the past several years. Tilda is a strong brand, but one that was facing significant input cost pressures due to increased government regulations. And as a result, EBITDA had been stagnant for several years. By divesting Tilda, our growth rates will accelerate, and we'd further reduce our input cost risk. As you know, Tilda sales are primarily based in the U.K., so selling it also significantly reduces our exposure to Brexit and ForEx. So while we may not have explicitly talked about selling this business, this sale is another example of us executing our strategy. It simplifies our organization, reduces risk and allows us to better focus our resources in places where we can create significant value for shareholders.

Now let me briefly turn to F '20 to give you a few headlines. As you'll recall from Investor Day, we told you that the U.S. would deliver further adjusted gross margin and EBITDA margin expansion as we continue our focus on economic growth and productivity. Along with that, we expected the top line would continue to shrink in F '20 before growing again. You will see that our guidance reconfirms our commitment to those promises. That said, we're going to make a few more important changes in terms of how we guide and report to better reflect where we are focusing our energy and how we are operating the business.

The first change for fiscal 2020 is that we are not going to give top line guidance because we're not relying on top line improvement to deliver the fiscal plan. That said, we will give you visibility throughout the year into the health of the Get Bigger brands, which are growing -- which are going to be the growth-generating businesses and the future of Hain. We're also going to continue giving you visibility to adjusted gross margin and EBITDA margin. Our guidance will focus on the adjusted EBITDA dollars and earnings per share since these measures show the health of our strategy, strength of our business and quality of our execution.

In terms of fiscal '20 headlines, we will, one, grow adjusted profit and EBITDA dollars even with lower top line; two, reestablish a profitable and stable baseline from which to grow; three, set up the Get Bigger brands for top line acceleration in fiscal '21; and four, effectively and intentionally manage the net impact of volume, price, mix and margin.

Second change to the fiscal 2020 guidance will be our reporting entities. Instead of reporting the U.S., U.K. and rest of world, we're changing our reporting segments to North America, international and corporate. We see tremendous opportunity for synergies in North America on purchasing, manufacturing, marketing and innovation and are linking the U.S. and Canadian teams closer together in terms of how we operate. Similarly, the international teams will work closer together as well to maximize our ability to deliver synergies.

The third change for fiscal '20 is how we report our international business. As you know, the British pound has dropped more than 25% since the first of the year due to the challenges and uncertainty related to Brexit. Focusing our international financial reporting on U.S. dollar equivalent will make understanding our true business performance in Europe even more challenging. Our job is to continue to build a great business and provide you with visibility to the areas of focus that are under our control. Given the significant currency fluctuations, we'll provide financial performance in both local and constant currency as well as performance versus the planned exchange rate. That will ensure we provide you as much transparency as possible, so you can assess our real performance and the items controlled by management.

In summary, our results show signs that the business transformation strategy, while in the early stages, is working. We're running this business with much greater discipline around a very clear strategy and a culture focused on productivity and profitable growth. We have a long road ahead, but our team remains optimistic about our future and our ability to deliver against our commitment from Investor Day.

With that brief overview, let me turn it over to James, who will provide more details on our Q4 financials and fiscal 2020 guidance.

Fourth quarter consolidated net sales decreased 10% year-over-year to $558 million or a 7% decrease on a constant currency basis. This was generally in line with our expectations. When adjusting for constant currency, acquisitions, divestitures and certain other items, net sales decreased 6% versus the prior year period.

Adjusted gross profit was $128 million or 23%; 190 basis point improvement year-over-year and 140 basis point sequential improvement. Improvements were driven by trade efficiencies and supply chain cost reductions in the U.S. and Project Terra sale, partially offset by commodity inflation. With this Q4 profit result, we delivered on our annual guidance on both adjusted EBITDA and EPS.

SG&A as a percentage of net sales was 15.8%, up from 13.9% in the prior year period. This was driven primarily by increased incentive compensation in 2019 on lower consolidated net sales.

Adjusted EBITDA was $57 million compared with $61 million in the prior year period.

Adjusted EBITDA margin improved 90 basis points on a sequential basis from Q3 driven by both the U.S. and our international businesses. This represents the third consecutive quarter of sequential margin improvement, even as we face $2.3 million of unfavorable FX.

We reported adjusted EPS of $0.21 based on an effective tax rate of 25.9% compared to $0.27 in Q4 last year with an effective tax rate of 25.4%.

Since Mark covered much of our segment reporting highlights, let me now focus on our cash flow and balance sheet. Operating cash flow for Q4 was $37.5 million, which was a significant improvement from $13.1 million in Q3. Capital expenditures in the quarter were $21 million and $77 million for the fiscal year. Going forward, we continue to expect an improvement in our operating free cash flow generation as we further improve our cash conversion cycle and continue to improve profitability, which I'll discuss in more detail with our fiscal 2020 outlook.

As of June 30, our cash balance was $39.5 million and net debt was $599 million. Inventory decreased on a constant currency basis by $20 million sequentially from Q3, excluding the impact of SKU rationalization. This reflects better forecasting and an improvement in our service to our customers in the U.S. Importantly, our inventory is $50 million less than our peak inventory levels in August 2018. Our bank leverage ratio was 4.22x as of June 30 compared to 3.32x at the end of fiscal 2018. We used the proceeds from the sale of the Hain Pure Protein business to pay down debt.

In terms of productivity, previously referred to as Project Terra, we have made significant progress and saved $32.9 million of cost in the quarter and $91.6 million in fiscal 2019, which was slightly better than we expected. We implemented an organizational redesign to better align resources and capabilities with the transformational strategic plan. Much of the savings associated with the redesign has been redeployed to eliminate complexity and build out our capability to deliver on our strategic transformation.

We are in the process of eliminating 350 low profit and velocity SKUs primarily in North America, representing approximately $50 million in annual net sales for the fiscal year 2019. Over time, we expect that our SKU rationalization will improve North America gross margin by approximately 150 basis points.

Part of the restructuring cost, in the U.K., we consolidated manufacturing facilities, which we expect will drive approximately $3 million in anticipated annual savings as well. These efforts resulted in the charge of $38 million related to inventory write-down, severance, lease obligation, fixed asset write-offs and other charges in Q4.

Before I get into guidance, I would like to share our financial perspective on the sale of Tilda. We expect the transaction to be about $0.04 to $0.06 dilutive to shareholders, depending on the use of proceeds. But given the strategic merit and premium price, we believe this is a good decision for the shareholders. That said, I'd like to give you some insight into our capital allocation philosophy and how we are thinking about deploying our proceeds from this transaction. First and foremost, management and the Board are committed to allocating our capital to create the most long-term shareholder value. Our first capital allocation priority is to ensure we have the optimal capital structure to run the business. After ensuring the leverage ratio is within our target range, management and the Board evaluate opportunities to either invest the excess capital or to distribute the excess capital via share repurchases or dividends. We intend to do just that with the proceeds from the Tilda sale, reduce our current debt and evaluate other distribution opportunities.

Now focusing on our outlook for fiscal 2020. Please keep in mind, we are excluding Tilda, which contributed approximately $200 million in net sales and $25 million in adjusted EBITDA for fiscal 2019. So from a financial modeling perspective, you'll need to take that out of your fiscal 2019 results when comparing it to our fiscal 2020 guidance. Though we have not finalized how we are going to utilize all of our proceeds from the sale of Tilda, for the purposes of guidance, we have assumed all of the proceeds will be used to pay down debt.

For fiscal 2020, excluding the results of Tilda, we expect reported adjusted EBITDA of $168 million to $192 million compared to adjusted EBITDA of $165 million in fiscal 2019. On a constant currency basis, we expect adjusted EBITDA of $173 million to $198 million, an increase of 5% to 20% as compared to adjusted EBITDA of $165 million in fiscal 2019. This represents significant improvement in our adjusted EBITDA performance given that ForEx and reinstating bonuses create an approximate $15 million headwind in this algorithm. Excluding these items, we expect our adjusted EBITDA will improve by $18 million to $42 million, a major improvement from last year and reflective of our continued momentum and confidence in our plan.

Adjusted earnings per diluted share on a reported basis are expected to be in the range of $0.59 to $0.72 compared to adjusted EPS of $0.60 for fiscal 2019 with an effective tax rate of 26% to 28%. On a constant currency basis, the adjusted EPS is expected to be $0.62 to $0.75, an increase of 3% to 25%.

It's important to note that in addition to the ForEx and reinstating the bonuses, which creates a $0.10 headwind on EPS, adjusted EPS also has a headwind of $7 million from the full year impact of our long-term incentive stock-based compensation for approximately $0.05 per share. Excluding this nonoperational headwind, our adjusted EPS will increase 20% to 45%, which demonstrate significant progress from fiscal 2019.

Due to the fluctuations in foreign exchange rate that I have mentioned, particularly with the British pound and the uncertainty around Brexit, our annual guidance assumes an exchange rate of $1.21 as compared to $1.30 in fiscal 2019. As Mark mentioned earlier, we will provide results, both on a reported and constant currency basis going forward. Keep in mind, each $0.01 in the British movement in the British pound equals approximately $650,000 of adjusted EBITDA on a translation basis. So the $0.09 movement in currency has a $6 million headwind going into fiscal 2020.

We expect significant profit growth from our efforts across the organization, including continued solid results in our international business, along with further portfolio and investment optimization and substantial operating improvement in North America. In fiscal 2020, we expect productivity savings to be similar to what we've generated in fiscal 2019, with slightly lower inflation.

Interest and other expense are expected to be approximately $23 million with depreciation, amortization, stock-based compensation expense of approximately $65 million.

We anticipate a significant improvement in cash flow from operations to be in the range of $110 million to $140 million compared to $39 million in fiscal 2019. This is approximately a $70 million to $100 million improvement from the prior year, excluding Tilda. It should also be noted that Tilda was a very cash-intensive business and, as a result of the sale, our cash conversion cycle will improve by 10 days.

Our cash flow guidance includes $20 million to $25 million of associated charges related to the restructuring and SKU rationalization that started in Q4 and other related items, which is significantly lower than the prior year, which included the CEO succession plan payment and transformational strategic plan that we do not expect to recur in fiscal 2020.

We expect capital expenditures of $70 million to $80 million, in line with our fiscal 2019 capital spending. We are making investments in manufacturing to our higher-growth businesses to meet demand and productivity investment to improve margin.

From a cadence perspective, the net sales we expect to shrink the rate of top line decline in the second half of the fiscal year.

From a profit perspective, we expect Q1 adjusted EBITDA to demonstrate slight growth year-over-year on a constant currency basis, in part based on our expectation that we will have higher incentive compensation expense in Q1 of fiscal '20 and we are lapping a long-term incentive compensation reversal. These 2 items represent an approximate $6 million headwind compared to the prior year period.

Q1 will also continue to be the lowest dollar profit contribution quarter similar to the prior year. Given the seasonality in our business, in total, profitability will improve as the fiscal year progresses, with Q3 and Q4 representing the largest dollar contribution quarters of the year.

Our operational and financial results in the second half of fiscal 2019 gives us confidence that our transformational strategy is working and we look forward to reporting continued progress through our fiscal 2020.

So yes, my 2 questions, I guess, I'll start off with understanding that you're still early on in the turnaround phase. The EBITDA range for fiscal '20 is fairly wide. And I was hoping you could tell us a bit about maybe some of the key factors that might push you in either to the lower end of the range or what needs to go right to reach the higher end of the range as well.

So let me take a shot at that, Andrew. So on the upside, there's many things that we have underway with regard to productivity, assortment optimization on the top line, pricing that we have not baked into this algorithm that everything goes right. So we're counting on continued progress. But to the extent that we execute with excellence, there's going to always be upside on both the top line and on the productivity in middle of the P&L.

In terms of things that could go wrong, I'd say the 2 risks in this plan that are of note: one is Brexit, which is an uncertainty that becomes very difficult for us to forecast. And while we've taken significant steps to mitigate any potential impact and we have done extensive analysis to know that we're not competitively disadvantaged versus anyone else, there's always risk there because there's uncertainty. I think the second risk in the plan is always around distribution. And I say that because as we're executing all of these changes, we rely on our retail partners to work with us, and we operate in an environment that is competitive. And so to the extent that we can stabilize and grow distribution, we have significant upside. To the extent that we lose more distribution than planned, we would have downside. But I think we've set a plan that strikes a very good balance, and I'm optimistic and confident that we will deliver on the expectations we set today.

And then that leads into sort of my next question, which is as you are now moving along the SKU rationalization, product testing, pulling some of the less productive and less profitable SKUs off the shelf, how -- I guess how have you been managing the shelf space that gets freed up? I know you'd like to be able to replace as much of that in your sort of Get Bigger brands with ones that are more productive on the shelf. Some of that may lead to just distribution losses for some period of time. But I guess, how has that conversion of shelf space gone relative to your expectations? And how is the sort of the conversation with retailers and customers has been going on as you've gone through this process?

Yes. Good question. So I would say it's gone in line with what we expected. As you'll recall, when we reset guidance last year, we talked about we had a disproportionate amount of SKUs sitting in the bottom quartile in terms of velocity. So we knew that we were going to be a net loser of space. And as we continue to pull out uneconomic investment, I would expect that we will continue to be a net loser of space certainly through the first half of fiscal '20.

As we talked about at Investor Day, we have a program called max to mix, which is about optimizing our assortment and proactively replacing nonperforming SKUs with much higher velocity and higher-margin SKUs. That's going fairly well. We're making some progress there. But honestly, the big key to us ultimately growing shelf space again is going to be minimizing the number of SKUs in the bottom quartile, so that when a retailer is resetting the category and looking at the things that aren't turning as fast that we are -- have a very small percentage of our SKUs there and then, secondly, that we have innovation to put in -- to replace the things that are coming out. In some categories right now, we have it, like tea, with our TeaWell proposition that's doing very well. In other categories, we don't have as much innovation, and so it becomes a little bit more challenging to hold onto that space.

So I guess, just following up on Andy's question. Am I right in thinking from your comments that if the distribution losses or reductions are expected to pay out through the first half of fiscal '20, then it should be in the sort of early second half of fiscal '21 that we'll start to lap the promise of those SKU exits and we should start to see normalization of sales growth in the U.S.? I'm just trying to get a sense of timing on that. And then as my followup, are you able to parse apart the U.S. sales dynamics between the regular sort of food grown en mass in many channels versus the natural channel and the e-commerce channel? And roughly how big is each of those segments for you now? I'll pass it on.

Yes. So on the distribution question, remember that we put this strategy in place in Q3 of last year. And so we are still taking out uneconomic investment until we get through the second quarter of this year. So I would expect that the distribution losses would be more significant in the second half -- I'm sorry, in the first half. And then when we get to the second half, we've already lapped some of those losses. Part of what you guys need to understand is that we don't have total control over the distribution. And an example I would give you, as we go through some of the uneconomic investment, we partner with retailers on that conversation. So for example, I believe at Investor Day I talked to you about 1 SKU at 1 retailer that loses close to $1 million. We went to that retailer and said, "You can either take a 50% price increase or we'll discontinue the SKU." We're not sure what the answer to that question is going to be. But obviously, if they take the price increase, the distribution holds. If they don't take the price increase, the distribution goes out. So some of it is a little bit hard to predict, but either one of those outcomes is going to be a better outcome for Hain than if we continue to do nothing and lose money in that -- with that SKU and that customer. So as we look at uneconomic investment, we're having a lot of those conversations with retailers. In some cases, we're able to replace last year's program with a better program. In some cases, we're able to -- in some cases, we're discontinuing items. In some cases, we're holding items. So it's a little bit harder to predict, which is part of the reason why we've been more reluctant to guide on the top line because there is some choppiness there in terms of some of those decisions. But certainly, given that we pulled more -- we will pull more economic -- uneconomic investment out in the first half, and we will start to lap the things that we pulled out in the second half, I would expect that the distribution trends will get better in the second half of the year. Although again, they will still likely be down in the second half because the profit maximization brands, we're taking a much more aggressive stance than we are on the Get Bigger brand.

With regard to your question on channels, we do have visibility to all the channels. And obviously, as we're looking at these uneconomic investments, they vary by customer and by channel. In many cases, we are partnering with retailers to change the pack size or the configuration that we were selling to them. A good example would be we were hand-packing things for specific customers and channels and have been able to replace it with a more automated package going forward that allows us to improve our margins and hold our distribution. So there's -- there are definitely customer-specific and channel-specific conversations that will impact the results in each. And so right now, I would say we're seeing decline across most of the channels because we're looking at investments in every channel and really trying to optimize the foundation, so that we have a strong core to grow from. But it varies by customer and it varies by channel in terms of which things are staying and which things are being replaced and which things are being pulled out.

To Andrew Lazar's question on the downside of your guidance, you had mentioned that Brexit is a risk. I think everyone is obviously aware of that. I just wanted to get a little bit more color, if I could, of what you are looking for in terms of the worst-case scenario from Brexit that's baked into your numbers. And I know it's so hard to analyze and predict, but I guess I assume in your numbers, you're forecasting a hard Brexit and the results from that. But I just wanted to get a little bit more color about what's actually in your guidance for that.

Yes, what I would tell you is even with the hard Brexit, it's hard to exactly tell you what the impact is going to be. But what we are doing and what we have been doing is taking steps to mitigate the impact of any change. What does that look like? Sourcing from different locations; moving around the ports in which we enter the country, so that we're moving goods through ports that are less busy and less likely to be clogged if there becomes a backlog due to Brexit; putting extra inventory into the country, so that we have more time to react to whatever changes come; moving from truckloads to container loads, so that we actually have less shipments going over the border. So there's a lot of things that we are doing to impact what we can control. What we can't control is what kind of tariffs would get put on businesses, how long the bottleneck at the border becomes, what happens to labor in our manufacturing plants with regard to immigration. So some of that is really very hard to forecast. What I would tell you is the things that we can control, we are controlling. They are built into this algorithm and guidance. The things that we don't control are going to be risks to this plan. But I would tell you, I think we're very well prepared. As you saw in the fourth quarter, we delivered double-digit earnings growth in constant currency, despite this Brexit environment. There were certainly expectations that there might be something material that happened at the end of Q3. And I think if you look at our Q3 and Q4 results, we weathered it very well and better than most. So I'm optimistic. I think we've built in the appropriate amount of risk, and I think we're well prepared to handle it.

Okay. And then my second question is on innovation. And Mark, you talked about how there's some in the market today, some coming later. Can you give us a little bit more color on -- again, I know you don't want to sort of give out trade secrets on a public call, but any help we can get in terms of the timing of some and maybe some of the categories you're focused on. I assume it's obviously a focus on sort of the investment brands you have, so maybe that's too broad of a question. But I was just hoping to get a little bit more idea of where we can expect some of the benefits of that innovation plan to start flowing through in a more meaningful way maybe.

Yes. We have reallocated the resources to the investment brands. You will see significantly more innovation in Personal Care this year than last year because we put in service to the business adequately last year. We basically stopped all marketing and innovation because we couldn't supply well. Now that we have the plant -- the new plant up in California and our supply is much better and our services much better, we have a robust pipeline of innovation that is going to be coming in Personal Care. We really have almost 2 years worth of innovation that's going to be going out.

We have TeaWell, which I talked about before, which was launched in limited markets that's going to be going into distribution more broadly on tea. And also have a pretty robust pipeline of ideas on tea. We have a robust pipeline of ideas on yogurt, some of which we hope will hit the market in the second half of the year. And the snacks portfolio, we have multiple brands within snacks, but we have some innovation and a couple of very big ideas that we are fast-tracking to try and get into the market in the second half as well. So you'll see little innovation in the first half. You'll see more innovation in the second half. And then I think when we hit F '21, you'll see robust innovation across all the brands and categories.

Just want to go a little bit back to the Tilda decision and just trying to understand. I guess it obviously was valuable -- highly valuable to someone else, and it was a business that was growing. And so I'm just trying to understand, would you look to sell other growth businesses as -- if the right price came along? Was there a real sense of urgency to sell Tilda or -- and did it really just not make sense being part of the total business?

Yes. So a couple of points. First, when we were at Investor Day, what we told you is any brands that we felt were not going to be accretive to the business that we would sell. Tilda did not fit in that bucket. But what we did get on Tilda was an unsolicited offer at a very premium valuation, which forced us to take a look at it and say, "Is now the time to sell this business?" And I would tell you, there were several factors in our decision to sell it. One obviously was the valuation, which was 13.5x. And honestly, by the time all the cash settled with working capital and the like, we'll net close to $350 million for this transaction, which is pretty close to what we paid for it. But when we paid for it, it was at $1.65 currency, and it's now at $1.21. So we've created some good value over time and felt that this was a very premium valuation to other deals that have gone on in the market.

The second factor was that we have some headwinds on that business. There has been significant increase in government regulations around the importing of rice and some of the specs that you need for the rice, which makes it very difficult to source from a country like India, which has far fewer controls around its supply. And so what happened is over the last several years, the input costs have almost doubled on that brand. And while you've seen robust top line, you've actually seen significant erosion in gross margin and EBITDA margin on that business. So while it was a premium margin business, it was becoming dilutive to our algorithm because of these headwinds. And we didn't see any relief from those headwinds anytime in the near future.

I think the third, obviously, given the currency fluctuation and Brexit, the feeling was that this is a good time to mitigate some of our risks in the U.K. And so the combination of those factors is what led us to decide to make that sale.

With regard to your -- the second part of your question, which was around would we sell other businesses that are growing. What I would tell you is our preference is to focus on brands that are uneconomic and that don't have potential to be accretive to our algorithm. But as a public company, people come to us all the time with offers to buy businesses, and we evaluate each one of them on their merits. And so while Tilda wasn't specifically for sale for the reasons I gave you, it was the right deal at the right time on that business. And should we receive other offers on other businesses, we would certainly entertain them. But proactively, we are really focused on the low-margin businesses and exiting those or fixing them in a short period of time.

Got it. And then just one follow-up on clarification. So you're reducing 350 SKUs that represent $50 million in revenue. Should we assume that most of that falls out of 2020? Or is this just, over time, in 2020 and 2021, that will fall out? Just trying to understand from a modeling standpoint.

Yes, yes. So again, we have to wait until the category is reset in order to take those SKUs out. You can't go to a retailer and just pull stuff off their shelf and leave holes. So we wait for the category reset, and they reset throughout the year. So the ones that reset in the first quarter, you'll have almost all of that volume drop out in F '20. The ones that reset in the fourth quarter, you'll have more of that volume drop out in F '21. So of that $50 million, I would assume about 60% or so, 65% drops out in '20 and the other 35% to 40% will drop out in F '21. But all of these SKUs are money-losing SKUs. That's important for you to understand. So every single one of them, when they come out, our algorithm gets better. There's about 150 basis points of margin improvement across the entire portfolio that comes with us pulling those 350 SKUs out.

Can you just touch on where you see the status of the portfolio? I believe, obviously, the Tilda deal you mentioned wasn't even necessarily one that you had anticipated. But how much more might there be to come? And how should we think of ways to today versus some of the remaining work to go?

Yes. So you remember from Investor Day, we talked about $0.5 billion worth of sales that generated 0 profit. We are working on that $0.5 billion. And we're -- like we've said, we're doing everything we can to improve the profitability of those businesses, SKU rationalization, pricing, design to value, et cetera, to maximize their potential while we have them. But if we can't stabilize them and get them to a double-digit EBITDA margin, we have always said that we would explore selling them. WestSoy, we sold in the fourth quarter. There are conversations on other businesses in that tail. I expect some of those will come to fruition over the course of the year. And I also expect that some of them will remain within our portfolio and some of them will get fixed and become much more attractive brands. So there really is a $0.5 billion of business that we're actively trying to "fix." And we have active conversations with external partners on how to do that, and we're working feverishly internally to fix them at the same time.

And a little bit related to that. You said at Investor Day that you expected top line down in fiscal '20, up in fiscal '22 and somewhere sort of yellow sideways arrows in between for fiscal '21. I know you're not giving specific top line guidance, but just about 6-or-so months past Investor Day, what's the right way to think about fiscal '21? Would it still generally be that same bucket? Is there anything looking trending, like it's maybe trending ahead of that or potentially a little slower?

So what I've said at Investor Day still holds, which is the rate at which the entire algorithm turns around is directly linked to how fast we shrink the tail. The Get Bigger brands are stable. We actually -- if you look at our consumption on the Get Bigger brands, it's up like 0.5%. So those businesses are stable on their way to becoming growth businesses. But you have a very large tail that has been a drag and is going to continue to decline at a fairly significant rate. To the extent that we're able to exit some of those brands in fiscal '20, our ability to make fiscal '21 a growth year becomes much more likely. But I don't control the pace of that happening. Obviously, you need the right buyer at the right price. Where there is no interest in a business and it loses money, we'll look at shutting it down. That we have a little bit more control over. But the pace at which the entire algorithm shifts to growth is going to be directly related to the shrinking of the tail. I have every confidence that the growth brands are going to grow. Remember, they're flat now with no marketing investment yet and very little innovation and just starting the assortment optimization program. So the fact that they're stable with relatively little focus gives me great confidence that when we put the resources, again, that we've articulated, we start to see that innovation come to market and the marketing come to market that those will be growing. It's just a matter of what happens to the profit maximization brand. And that's not totally in our control. So we've been a little bit conservative in the guidance for F '21 because we're assuming that we have those brands forever. But as those brands -- the number of those brands and the size of those brands relative to the total sale shrinks, the algorithm will shift toward growth.

James, wondering if you could touch more on the Terra savings program. The $90 million came through for 2019. You confirmed the aggregate $350 million. But how do we think about the phasing of the savings from here? Is the cumulative $350 million still expected through fiscal '20? Then I guess if so, it doesn't sound a lot of savings are actually dropping to the bottom line this year. So any comments on the phasing would be helpful.

So in the Project Terra in the productivity savings, we believe that it will be -- these savings for this year will be similar to what we had in 2019. And obviously, we have some inflation offsetting the gross productivity savings. And a lot of that is going to come from our Board cost. We're doing zero-based budgeting for our Board cost and SG&A. We'll continue to focus on design to value, improve our price architecture, continue our network and supply optimization and then invest capital where we have productivity. So it's going to be roughly the same. There's obviously some inflationary headwinds against it that we're up against, but we'll get to the gross $350 million.

Okay. And then Mark, just to follow up on the international businesses. I mean collectively, Canada, Europe, the U.K., they're all-sustaining mid- to high single-digit organic revenue to the end of F '18. I think you broke down this past year, as you saw again in Q4, I mean, the long-term algo is now 1% to 3% going forward. But the comments this morning sounded fairly upbeat. So can you maybe just bridge what's happening with the sharp slowdown last year, the lower algo going forward and how that reconciles with some of the more positive comments?

Yes. What I would say is in constant currency, the fourth quarter was not bad at all. The problem has been the ForEx. So if you look at how the business in the U.K. and Europe are performing in local currency, they are growing. But when you have a 25% devaluation in the pound in absolute, which is the way we've been reporting, it's declining. So peel back the onion and look at it in constant currency versus absolute currency, and that's one of the reasons we said going into F '20, we're going to provide you with guidance both in constant currency and absolute currency because I don't know what's going to happen to the pound from here given a new prime minister and potential hard Brexit on the horizon. Markets don't like uncertainty and the currency is going to fluctuate. But if you look at just how they're performing in local currency, the businesses are doing very well, very well on the top line, very well in terms of margin expansion, very well on the bottom line. And I would expect that momentum to continue, barring against something in Brexit that I can't control. But we feel really good. We've got 10 brands that have #1 and #2 shares. They are very well positioned relative to the competitive environment. They are very well positioned relative to Brexit. We did an extensive third-party analysis of what percent of our ingredients come from outside the U.K. or versus the other competitors in our category. If anything, we think we're slightly advantaged. So as pressures are on everyone with increased thoughts, our ability to pass on pricing should be there. Our ability to weather the storm better than some of our competitors should be there. So I am optimistic about our performance there and the strong leadership team that we have in place and the performance they've been delivering.

So maybe if we tie it back along with some algo, the plus 1% to 3%, I guess, what drives the deceleration in the future versus the rates in the past? Because I mean the sales basis are still pretty smaller. So do you think there's opportunity to grow off the base? Is this just more of a conservative stance, more SKU rationalization there as well? Just trying to bridge the long-term algo.

Yes. So short term, similar to the U.S., we have segmented the brands internationally and are looking at uneconomic investments there, too. So short term, there will be some headwinds on top line just as there are in the U.S. Although obviously, they've been better managed over time, so the amount of uneconomic investment is smaller there than it is here in the U.S. But when you strip that aside, there is robust growth potential. We've got a great plant-based meat substitute business in Linda McCartney. We have plant-based beverages that are growing very nicely. We have some very high-margin businesses in Hain Daniels that are well positioned competitively. So in constant currency, I expect that these are growth businesses.

In absolute currency, again, just given the difference between the $1.30 and the GBP 1.21 year-over-year, in local currency, it's going to be fine. In absolute currency, it's going to show a negative on the top line. We lost $53 million in F '20 versus F '19 just due to that $0.09 currency fluctuation. So $53 million of top line comes out just due to currency. So if you take that out and you look at it in local currency, it's a much more robust business.

Question on gross margins. When you decompose that gross margin impact for the quarter and even thinking ahead, how would you break that down in terms of -- because I think the gross margins were better than a lot of people had expected. Obviously, ton of moving parts in terms of SKU rationalization. There must be stuff going on in terms of mix that has a pretty big impact. But if you could do your best to break down that and how you're thinking about gross margin specifically for fiscal '20. And then I have a follow-up.

Yes. So I don't have specific numbers by specific tactic because they somewhat overlap, but it is a combination of SKU rationalization, uneconomic investment, pricing, mix and then the middle of the P&L, the huge improvements we've made in our supply chain that are all -- the combination of those things are all driving the margin improvement. As you get to F '20, we expect year-over-year margin improvement every quarter, so not necessarily sequential because Q1 is a much lower-margin quarter than Q4 as an example. So it will be -- Q1 will be lower than Q4, but it will be higher than year ago. So I would expect that continued progression throughout the year and margin expansion every quarter versus year ago.

If we were to think ahead, even as we get out of fiscal '20 into '21, what are some things that might be hitting at that point? I would imagine, as far as your network -- the co-packing network, perhaps, you will be further along on some of the innovation cycle that you can see internally. What are some things that might give you another gear at that point as you think about fiscal '21 and beyond?

Yes. From the top line, it's 3 primary things. Assortment optimization, which again, at Investor Day, we talked about our highest-margin, highest-velocity SKUs are only in 30% of the ACV, so there's a significant distribution opportunity on those SKUs. Second is going to be innovation, which I've talked a little bit about earlier on the call. And the third is going to be marketing. We are in the process of creating new marketing campaign and having a robust formula for evaluating ROI that we haven't had previously. I'll show you some of that at Barclays Investor Conference next week, some of the progress that we've made there.

In the middle of the P&L, as we simplify the number of SKUs that we have to manage and the number of co-manufacturers that we have to manage, it's going to allow us to simplify our supply chain. Less distribution centers, but working to get every SKU into each distribution center, so we can ship full truckloads. It's going to be a very important cost savings metric.

And then the other one that will help us both on top line and in the middle of the P&L is pricing. Today, we charge basically the same amount, whether you're ordering 2 pallets or ordering a full truck. We don't differentiate well whether we're shipping it 1,000 miles or 200 miles. We just don't have a very robust pricing matrix. So there's a lot of opportunity in terms of just like every other CPG company having bracket pricing, charging for the amount of miles that you're driving, making sure that we have the right price size architecture on shelf, as we've done a robust analysis, the shelf we find, in some cases, we are at the same price as everyone else, and we're offering 3, 5, 7 more ounces of products than everyone else. So there's a significant amount of work going on, on the pricing. And you will start to see that hit the marketplace as we get towards the middle of F '20, which, again, I'm hopeful will improve our trajectory in the back half of the year.

I'd like to thank you guys for all your time and understanding and support. We are very excited about the progress we're making. I think if you go back to Investor Day and you look at the things that we promised, we're delivering pretty much on all of them and, frankly, at a faster rate than what we committed to. So I'm excited about where we are. I'm confident on our future, and I look forward to continue dialogue with you all as we move forward on this path of transformation. So thank you. And with that, I'll turn it back to the operator.